Foreclosure Alternative Programs For Troubled Homeowners–Can Mortgage Assistance Programs Stop Foreclosures?

Foreclosure alternative programs like short sale options or deed in lieu of foreclosure plans have been able to assist many homeowners who were struggling with various mortgage troubles but, after failing to find the assistance they need, were faced with the loss of their home. Many mortgage lenders have offered these foreclosure alternative plans to homeowners who had attempted to save their home but are simply in a bad financial position and can no longer afford to be a homeowner.

Short sales, for instance, have helped homeowners who have an underwater mortgage and have seen financial troubles as a result. Many homeowners have seen the value of their home decrease over the past months and, for some, making their home loan payment has been difficult. For many homeowners with an underwater mortgage a short sell option has been the way which they can’t be rid of their underwater home and have the remaining balance they owe forgiven by their lender.

Deed in lieu of foreclosure plans have been a more popular option for homeowners who cannot obtain mortgage assistance through a modification or payment reduction plan, but still wish to avoid foreclosure. While surrendering one’s deed to their home may cause damage to the homeowner’s credit score, it will be much less severe than a foreclosure and there are many mortgage lenders who are willing to work with homeowners in these cases. Some mortgage lenders have allowed homeowners to surrender their deeds but also stay in their home for a few months so that alternative living arrangements may be made.

Alternatives to foreclosure are not something that is used by every mortgage lender, but homeowners may find options from many of the nation’s top home loan servicers. Homeowners who have been denied a home loan modification through the Obama Making Home Affordable Program may be able to speak with their lender and work out either an alternative modification, a reduced payment plan, or find one of these foreclosure alternative plans that may be beneficial for their mortgage situation.

While there are housing counselors approved by the Department of Housing And Urban Development, homeowners are often advised to primarily talk with their mortgage servicer about options that may be available. Yet, if additional outside resources are needed, homeowners do have options to help them in their mortgage troubles by either finding a more affordable home loan payment plan or by helping them transition from their home to an alternative living arrangement.